Kohl's 2Q earns fall more than 12 percent

Department store chain Kohl's Corp. said Thursday that its second-quarter profit fell more than 12 percent as same-store sales dipped on a consumer pullback in spending.

The Menomonee Falls, Wis.-based company said it earned $236 million, or 77 cents per share, during the three-month period ending in August. That was down from the same period last year, when Kohl's earned $269.2 million, or 83 cents per share.

Analysts surveyed by Thomson Reuters expected earnings of 73 cents per share.

Sales rose 3.8 percent to $3.7 billion, on par with estimates. But same-store sales — a key figure in retailing that measures sales at stores open at least a year — fell 4.6 percent. The results came after the market closed Thursday. Kohl's shares rose 68 cents, or 1.4 percent, to close at $48.27. The stock has traded in a 52-week range of $36.81-$63.97.

Kohl's Chairman and Chief Executive Larry Montgomery said margins improved in the quarter as the company saw greater penetration of its private and exclusive brands, which also helps Kohl's keep expenses down.

The company is assuming that same-store-sales will fall between 2 percent and 4 percent in the third and fourth quarters. Retailers are having a tough time as consumers grapple with rising food and energy costs and pull back their spending.

"We remain conservative in our sales expectations for the fall season and will manage our business accordingly," Montgomery said in a statement. "We are well positioned to chase business should the environment improve."

Kohl's opened 28 stores in the first six months of the year and ended the quarter with 957 stores in 47 states.

The company expects to open 47 more stores this year, bringing its total for the fiscal year to 75. In the next fiscal year, Kohl's said it expects to open about 50 stores and remodel 60.

Kohl's raised its outlook for the year above analyst estimates and offered guidance for its third and fourth quarters.

The company said it now expects to earn between $3.02 and $3.18 per share for the year. Analysts are predicting Kohl's will earn $3.07 per share for the year, according to a poll by Thomson Reuters.

Kohl's announcement marked a reversal from last quarter, when the company lowered its forecast for the year to between $2.95 and $3.15 a share. Its higher outlook is more in line with its original guidance of earnings in a range of $3.15 to $3.50 per share.

For the first half of the year, Kohl's net income was down about 18 percent to $389 million, less than the $478.2 million it posted last year. Sales were up more than 2 percent to $7.3 billion, from nearly $7.2 billion last year.

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